Yes, there's an obvious typo; their costs and profits are
both
higher. As Sally has pointed out to me privately also, there
are
few public figures for costs and profits. What figures have
been
given are not of publishable quality, with the exception of
Elsevier's annual report figures for their return on sales.
But
what there certainly is, however, are figures for the sum,
the
price to the purchaser.
So it is certainly true that the possibility is open to any
publisher of maintaining profits and lowering prices by
increased
efficiency.
David Goodman, Ph.D., M.L.S.
dgoodman princeton.edu
----- Original Message -----
From: Joseph Esposito <espositojgmail.com>
Date: Thursday, June 14, 2007 8:45 pm
Subject: Re: Self-Archiving and Journal Subscriptions:
Critique of PRC
To: liblicense-llists.yale.edu
> Is there a typo in this thread? As I read it, the
assertion is
> that commercial publishers have higher costs and lower
profits
> than NFPs. My experience is precisely the opposite,
though I
> can't say that I have peeked at the income statements
of more
> than a small fraction of the 24,000 peer-reviewed
journals.
> Obviously, a lot of this is accounting methodology, and
NFP
> financial analysis is rarely on a par with the
commercials, but
> even so, my limited experience shows higher
productivity and
> lower costs for the commercials by most management
metrics.
> NFPs tend to pay people less, but have lower
productivity for
> many reasons (not least being that they pay people
less).
>
> No doubt others have different experience, but I would
really
> like to see the data before making any
generalizations.
>
> Joe Esposito
>
>
> On 6/13/07, Sally Morris (Morris Associates)
> <sallymorris-assocs.demon.co.uk> wrote:
>> I'm particularly interested in David's assertion
that
>> commercial publishers' costs are at least 50
percent higher
>> than those of nonprofits, and their profits lower.
This matches
>> my own hunch, but I've been looking in vain for
information on
>> exactly this, and so would love to know his source
>>
>> Sally Morris
>> Consultant, Morris Associates (Publishing
Consultancy)
>> Email: sallymorris-assocs.demon.co.uk
>>
>> -----Original Message-----
>> [mailto:owner-liblicense-llists.yale.edu] On Behalf
Of David
> Goodman> Sent: 31 May 2007 01:33
>> To: liblicense-llists.yale.edu
>> Subject: RE: Self-Archiving and Journal
Subscriptions: Critique
> of PRC
>>
>> The economic argument goes as follows:
>>
>> There is an economic advantage in the simpler and
more complete
>> access to research information from open access. It
is not a
>> very great one--I think that some of the
calculations are way
>> off the mark, but let's say it's 5%. That's about
the cost of
>> paying for open access publishing.
>>
>> The problem is that the savings comes only when
everyone
>> publishes OA, and all institutions and funders pay
for it. So
>> the early adopters take the risks. The transition
to open
>> access has always been the difficult part. There is
temporarily
>> some additional money needed: for the university
researchers to
>> pay for the publishing, while still needing to
maintain a
>> library, for the journal publishers to risk the
loss of
>> subscriptions while converting to open access--it
would appear
>> that neither side can move first.
>>
>> There are four ways of making the change.
>>
>> The most obvious is to reduce the size of the
highest cost
>> segment: the costs of the commercial publishers are
at least
>> 50% higher than the non-profits, and their profit
margin is
>> also much greater. A determination by the major
universities
>> to not pay for ineffective periodicals, those
causing the
>> collapse of the lowest half of their journals,
would do it. But
>> as long as even 100 universities are willing to
pay, a journal
>> can continue. This takes the realization of the
faculty that
>> the loss of access will be only temporary, because
with the
>> failure of the inefficient journals publication
will be
>> redirected to the efficient ones.
>>
>> Equally obvious is removing a certain amount of
publication
>> from the journal system altogether. For the very
best
>> researchers, their is minimal advantage in
publishing outside
>> of such repositories as arXiv--their work will be
noticed and
>> read every bit as well, and their established
reputations will
>> substitute for peer review. I liker this result,
but the
>> difficulty here is that this will differentially
affect the
>> best journals, the ones that publish their work.
The only way
>> of avoiding such an effect is the rapid complete
conversion of
>> publication in those areas.
>>
>> Is there an alternative that will protect the
commercial
>> publishers? Yes, optional open access--the ability
of the best
>> funded laboratories (and the most generous funders)
to pay for
>> individual articles being available open access,
with this
>> stepwise reducing the cost of the journals (The
Springer plan
>> provides in detail how they will calculate the
lowering of
>> subscription costs--other publishers are less
specific). As
>> journals are paid for in advance, there's a two or
three year
>> delay, and it will be interesting to see if there
is any effect
>> on the 2008 Springer prices. If they thought it
worth the
>> investment to use some of their available capital
to reduce the
>> prices further, it could go very fast. Perhaps the
alternative
>> in the paragraphs above may give them some reason.
>>
>> The fourth is even less attractive: the forced
conversion by
>> funders. With governmental funders, I have always
disliked
>> this--once you rely on mandates, you have to accept
whatever
>> the mandators may choose to do. The only reason
PubMed Central
>> is even acceptable is because it is being operated
by NCBI, one
>> of the very few truly efficient governmental
agencies, and with
>> a very long record in successful innovation.
>>
>> As for the political argument, Jan Velterop
outlined it very
>> well in a single sentence: "Of course it is a
'political'
>> statement; it only applies if one accepts that
formally
>> publishing the results is integral to doing
research." (There's
>> an unstated premise that I think can be assumed on
this list:
>> that research is worth doing.)
>>
>> David Goodman, Ph.D., M.L.S.
>> dgoodmanprinceton.edu
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